Codes of conduct: challenges and opportunities for workers' rights.

• Date: 22 September 2004
• Author: Esbenshade, Jill
• Published date: 22 September 2004
• Author: Esbenshade, Jill

THE GLOBAL ECONOMY HAS BROUGHT NEW CHALLENGES AND OPPORTUNITIES TO THE struggle of workers; the movement toward company codes of conduct and workplace monitoring present both. (1) Although it is a new phenomenon for private enterprises to investigate labor conditions, U.S. companies have long adopted codes of conduct that regulate the operations of their production facilities abroad. Concern over the behavior of multinational corporations in developing countries, where such corporations sometimes influence national politics, destroy the environment, and perpetuate labor violations, is longstanding. In many areas, efforts have been made to rein in abuses through the use of voluntary standards. These agreements have not always had significant effects, but there are recent signs of hope in the apparel industry that such pledges can be leveraged to improve working conditions and workers' right to unionize. Codes and monitoring, originally used by apparel companies to protect their reputations, have become tools of labor union campaigns that involve worker and consumer organizing.

Codes governing transnational companies' activities in foreign countries were first introduced 30 years ago, as global production began to expand. The mid-1970s saw the promulgation of multilateral codes through the United Nations Commission on Transnational Corporations, the Organization for Economic Cooperation and Development (OECD), and the International Labor Organization (ILO). These bodies developed broad codes that dealt with limiting corporations' involvement in local politics, labor conditions, and environmental and safety issues (Cavanagh, 1997; Compa, 1995). However, President Reagan blocked negotiations on the U.N. code; the other two, although adopted, did not involve enforcement mechanisms and failed to have much impact. Moreover, pushed by International Monetary Fund (IMF) and World Bank policies, developing countries that had been instrumental in promoting such codes began to view multinational corporations less as unwanted intruders and more as coveted investors.

The establishment of private codes that focused on specific countries or industries marked subsequent years. In the late 1970s and the 1980s, there was a proliferation of codes promoted by individual governments, civil rights activists, environmental groups, and other nongovernmental organizations, rather than intergovernmental institutions. The most well-known codes, and for some observers the most successful, were those targeting transnational companies' participation in and support of the apartheid system in South Africa, such as the Sullivan Principles (Varley, 1998). Other codes focused on religious minorities in Northern Ireland, environmental safety, and forced labor in specific countries. With few exceptions, these accords did not attract many signatories (Compa, 1995; Cavanaugh, 1997; Varley, 1998). In the 1990s, apparel manufacturers began to adopt individual company codes to protect themselves from growing criticism about the labor conditions in their contracting factories abroad.

The apparel industry has historically relied on a contracting system that has allowed brand-name companies to eschew legal liability for the working conditions of those who actually sew their garments. With the globalization of production, this disjuncture between profit-makers and workers was widened by distance, anonymity, and increasing layers of middlemen. Moreover, workers were now not only divided by workplace, but also by borders, language, and history. A race to the bottom ensued with brand-name companies using these divisions and their own unrestricted mobility to play workers (and countries) against each other.

These factors, along with a more generalized attack on workers' rights, has made unionization in the garment industry nearly impossible. Yet in the last few years, we have seen some impressive victories in export-processing zones in Mexico, the Dominican Republic, and Indonesia. These victories are in part the result of a movement that first demanded that companies outline labor standards and then that they abide by them.

Until the 1990s, apparel companies operated on the principle that they were in no way responsible for the conditions in their contracting factories. In 1991, a reporter asked Nike's general manager in Indonesia, John Woodman, about labor conditions in Nike's contract factories. Woodman responded, "It's not within our scope to investigate." He added that he knew of labor problems in six factories, but did not know what they were about: "I don't know that I need to know" (in Barnet and Cavanagh, 1994). Woodman's reactions were indicative of the industry as a whole. Faced with exposes of horrendous conditions, the first line of defense of companies has often been outright denial, followed by an "it is not us, we are not the employers" approach. The corollary is, "it is not us, we did not even know this was going on." However, because of unrelenting public pressure, many companies have acknowledged some level of accountability for their contractors' employees.

In 1992, Nike adopted a "Memorandum of Understanding and Code of Conduct for Indonesian Business Partners" and Levi Strauss promulgated a comprehensive code covering all of its suppliers worldwide, both in response to negative publicity (Shaw, 1999; Schoenberger, 2000). Since 1992, hundreds of companies have followed suit. In 1995, President Clinton released his Model Business Principles encouraging "all businesses to adopt and implement voluntary codes of conduct for doing business around the world."

The president laid out a set of basic standards to serve as a common denominator for code content. However, company codes continued to vary considerably in scope. Most company policies on international operations are general and not geared specifically toward protecting labor standards. Of those that include labor standards, most leave out key elements of the president's model, most commonly the rights to freedom of association and collective bargaining (Varley, 1998; Sajhau, 1997; Jenkins, 2002).

The adoption of codes of conduct was eventually followed by implementation efforts in the form of monitoring. By and large, companies implement monitoring either by sending their own employees to inspect contracting facilities or by hiring an outside commercial firm to do so. Companies generally do this on their own, although a growing number are associating themselves with a coordinating body. In 1996, Clinton followed his push for codes with the establishment of a presidential taskforce comprised of brand-name apparel companies and nongovernmental organizations (NGOs). The taskforce focused on promulgating a code specifically for the garment industry and set up a monitoring body, the Fair Labor Association, to oversee code implementation. Such multi-stakeholder initiatives in the U.S. and Europe, as well as the industry's own association, have formed other oversight organizations such as Social Accountability International, the Ethical Trading Initiative's programs, and the Worldwide Responsible Apparel Production program. All include companies in their decision-making bodies and rely, primarily or exclusively, on private commercial firms to inspect the factories.

A handful of apparel companies have also agreed to alternative monitoring projects in which a local NGO undertakes to monitor a very limited number of factories. These projects, which originated in Central America, led to a debate over the use of private versus independent monitoring. In 2000, college students, who had emerged at the forefront of the anti-sweatshop movement, and others established the Workers' Rights Consortium (WRC). The WRC is an independent global monitoring body with the specific mission of helping universities implement their licensee codes for products emblazoned with school logos. The WRC has had a significant impact on the field of monitoring, challenging the confidential and superficial nature of audits, and has been crucial to the success of several organizing campaigns around the world.

Before describing the development of codes and monitoring, I will provide an overview of the structure of the global apparel industry and the common labor violations found in it. This discussion will help to clarify the conditions workers face and the problems monitors are trying to detect. I will then briefly outline some of the problems found with private monitoring and how independent monitoring is changing the nature of the debate. Finally, I will turn to the case of BJ&B in the Dominican Republic, which became the largest factory in the region to have a collective bargaining contract and was the first apparel export-processing plant in the Dominican Republic to pay above the minimum wage. The case study describes how codes of conduct and independent monitoring were key elements in the workers' victory, as well as how the workers' early struggle was integral to the creation of a student movement around codes and to the formation of the WRC. Codes and monitoring, initially a dubious form of self-regulation, now appear to hold real potential for improving conditions largely due to the ability of independent monitoring to help link worker and consumer campaigns.

Exploitation in the Apparel Industry

The apparel industry became the focus of the movement urging codes for several reasons. First, the image-dependent nature of branded apparel made the industry particularly vulnerable to publicity attacks (Klein, 1999). Second, the garment industry has historically been a target of unions, consumers, and women's groups for its sweatshop practices, which have reemerged in full force with globalization. Garment production is the first step for many countries as they enter the global economy; thus, many of the poorest countries in the world are involved, resulting in intense competition based on extremely low wages...